Bankruptcy Claim a Spur to Attendants in NWA Talks

Liz Fedor On Apr 25, 2007
Source: The Star Tribune

Negotiators for Northwest Airlines flight attendants said Monday that they need to reach a deal "in the next few days" to preserve a $182 million claim in the airline's bankruptcy case, which could be worth up to $18,000 per flight attendant.

Other Northwest unions have received claims as part of their concessionary labor agreements, but the flight attendants will be prohibited from securing their own unless they ratify a labor deal before the airline leaves bankruptcy in June.

"Our goal remains to negotiate the best agreement possible and to preserve the flight attendants' right and opportunity to vote while there is still time to obtain the equity claim," Jay Hong, the union's president, said in a statement Monday afternoon.

Leaders from Northwest and the Association of Flight Attendants (AFA) have been in marathon bargaining since last Thursday, when federal mediators ordered them back to the table.

Last year, flight attendants rejected two tentative agreements that provided Northwest with $195 million in annual labor savings. Since July 31, the attendants have been working under imposed pay rates, benefit changes and work rules that achieved Northwest's target for cost savings.

The flight attendants have resisted that level of cutbacks, but U.S. Bankruptcy Judge Allan Gropper recently ruled that the $195 million target would remain intact. In addition, a federal appeals court panel in New York blocked the attendants from striking, and the National Mediation Board refused to declare an impasse in the talks.

"The attendants have tried every avenue they could think of, and they've sort of come up empty," said John Remington, a labor expert at the University of Minnesota.

The flight attendants are Northwest's only labor group without a contract, and union spokeswoman Karen Schultz said attendants recognize they could forfeit the $182 million claim unless they ratify a deal.

Northwest expressed a desire Monday to reach a deal, but did not comment on the status of the talks.

By a 4-1 ratio, the attendants rejected a deal last June negotiated by their former union, the Professional Flight Attendants Association. In July, 55 percent of attendants voted no on a deal negotiated by their new union, the AFA.

In a special update to members Monday, union leaders said they were "close to agreement" with management on an "early out" severance package for attendants who want to leave. The sides also were negotiating on scheduling issues important to the attendants.

However, the union faces a stiff challenge. Its leaders said: "Because of the $195 million target approved by Judge Gropper, the company was not willing to consider any of the economic items unless the union were willing to trade for an item that would offset the costs."

John Budd, a human resources professor at the University of Minnesota, said, "It's almost like [the attendants] are negotiating with themselves. They are trying to come up with a method for delivering $195 million that they can stand behind."

Budd and Remington both said it is difficult to predict how flight attendants will vote if there is a third tentative agreement.